Legal disputes can be a significant challenge for small businesses. It can drain financial resources and hinder growth prospects. It can also divert valuable time and attention from core operations.
However, there is a growing solution to navigate legal battles with confidence and resilience. And that is global legal funding.
Global legal funding is the practice of providing financial support to those involved in legal disputes on an international scale. It aims to bridge the financial gap between those seeking legal recourse and the litigation costs.
The Role of Global Legal Funding in Empowering Small Businesses
Here’s how commercial litigation funding can help small business owners today:
1. Leveling the playing field
Often, legal disputes can be David-versus-Goliath scenarios. Small businesses find themselves pitted against more financially equipped opponents.
Global legal funding will help level the playing field. It gives small business owners easy access to the capital they need for legal action. They can be able to engage experienced legal representation. They can gather evidence and navigate the legal system without worrying about finances.
2. Providing financial relief
Legal battles are financially burdensome for business start-ups or entrepreneurs with limited budgets.
Global legal funding can alleviate the financial strain by giving financial relief. It acts like a cash advance.
Small businesses can get the finances required to cover litigation costs. This will allow them to focus their resources on core business operations.
3. Preserving resources
Legal disputes can divert attention away from vital business activities.
Small businesses usually lack the time and resources for legal battles. And this can hamper their competitiveness and growth.
Legal funding will help preserve such resources. It gives business owners the financial means to:
- Conduct extensive research
- Outsource legal work
- Create effective legal strategies
Businesses can continue their daily operations while their legal team fights.
4. Minimizing financial risk
The financial risks associated with pursuing legal claims can be daunting. The fear of incurring substantial costs and losing the case often discourages them from seeking justice.
Unlike a traditional loan or a business loan that may have high interests and require you to pay it back, global legal funding is non-recourse. You will only be obliged to repay the funding you have received when your case is successful.
Non-recourse pre-settlement funding will significantly reduce the financial burden. Also, it will allow small businesses to file legal action without detrimental consequences.
5. Expanded legal opportunities
Global legal funding will open doors to more legal opportunities. For instance, they can pursue legal claims against large entities. And they can do so without financial hindrances.
Small business owners can protect their intellectual properties against corporations. They can also seek compensation from them or resolve any contractual disputes without fear.
Legal funding will empower small businesses to assert their rights. It will protect their interests in an equitable, fair manner.
Overcoming the 6 Challenges of Getting Global Legal Funding
Here are the challenges of obtaining global legal funding and strategies to overcome them:
1. Meritorious claims
It can be hard to convince litigation funders that the legal claim has merit and a high likelihood of success.
To overcome this, build a strong case. Support it with comprehensive documentation, evidence, and legal analysis.
You can work with experienced law firms. They can assess the merits of the claim and provide a persuasive argument.
Demonstrating the potential for a favorable outcome increases the appeal for funders to invest in the case.
2. Selection of suitable funders
Finding the right global legal funding provider can be a challenge.
Here’s how to overcome such a challenge:
- Research and identify funders who specialize in the relevant practice area or jurisdiction
- Seek referrals from legal professionals
- Conduct thorough due diligence on potential funders
- Evaluate their track record can help in selecting the most suitable partner
- Engage in open and transparent communication with funders
3. Financial viability
Funders assess the financial viability of a case before providing funding to corporate clients. This assessment includes evaluating the following:
- potential damages or settlement amount
- the recoverability of the funds
- the overall financial feasibility
Thus, present a clear financial analysis. It must demonstrate the potential return on investment for the funder.
You may also need to collaborate with financial experts to present a compelling financial case.
4. Transparency and disclosure
Funders require transparency and disclosure of relevant information about the case. This includes sharing all relevant facts, risks, and potential conflicts of interest.
Provide comprehensive and accurate information to the funder. Disclose any material facts that could impact the case or funding arrangement.
Maintain open and honest communication throughout the litigation process. This will build trust and increase the possibility of obtaining funding.
5. Negotiating favorable terms
Negotiating the terms of the funding agreement can be a challenge. Both parties will most likely seek to protect their interests.
An experienced law firm can be instrumental in achieving favorable terms. Carefully review and understand the terms. Ensure they align with the goals and expectations of all parties involved. These include repayment obligations, interest rates, and any contingencies.
6. Timing and urgency
Legal funding needs may arise with time-sensitive deadlines or during critical stages of a legal dispute. Overcoming this challenge involves planning and initiating discussions with funders early.
Start the funding process early. This can ensure sufficient time for due diligence, negotiations, and securing the necessary funds before critical deadlines.
Conclusion
Global legal funding serves as a powerful tool for empowering small businesses in legal disputes. They no longer need to be deterred by the complexities and costs associated with legal battles.
However, obtaining litigation funding comes with challenges. Make sure to take a proactive approach and be well-prepared. Doing so can significantly increase the likelihood of securing financial support to pursue legal action or a pending lawsuit and protect one’s interests effectively.
With global legal funding, businesses can confidently pursue justice. They can also protect their interests and thrive in the competitive business landscape.
Photo by Scottsdale Mint on Unsplash
